After a brutal year of shakeout, the video arcade game industry has its comeback hopes riding on a laser beam.
Video technology that relies on laser light to project high-quality images from silvery video discs onto screen displays have changed the look of video games, and the industry is counting on that change to lure people back into the arcades. The first generation of video disc games premiered this week at the Amusement and Music Operators Association convention.
"Fully 75 percent of the arcade operators have been waiting and waiting for months for this show," said J. D. Meacham, an AMOA vice president. "They've been delaying their orders to see what these new games had to offer."
What they offer is a degree of high-resolution imagery unrivaled by any of today's computer-based arcade games. With conventional video arcade games, images are computer-generated and collected from the computer's memory. The laser discs, on the other hand, store the actual images. For example, photographs, animation, movie footage or any other kind of imagery can be recorded on the disc, which makes it the video equivalent of a phonograph record.
Consequently, a laser disc game of a battle in outer space could feature the same cinematic special effects used in a "Star Wars"-like movie. In fact, Atari has converted Clint Eastwood's "Firefox," a film about a super-sophisticated fighter plane, into a laser disc game complete with action footage from the film.
The arcade operators have certainly lacked hit games this year. According to industry estimates, coin-operated revenue will drop from a peak of $7 billion in 1982 to roughly $4.5 billion this year. The number of arcade machines shipped has dropped more than 50 percent, from a high of roughly 400,000 last year to fewer than 200,000 this year, according to Donald Osborne, vice president of marketing for Atari's coin-operated games division.
Even worse, says Leo Finn, a Balley Mfg. Co. executive, revenues per machine have dropped by nearly one-third from 1982, with many games taking in less than $50 a week.
"We did suffer from overestimation of the market," said the AMOA's Meecham, "so we went through the classic marketing pattern of a shakeout."
Not only have games manufacturers like Balley bled red ink, said Meecham, but roughly 20 percent of the estimated 9,000 U.S. games arcades blinked out of business last year.
Some observers, however, are skeptical of the importance of laser games. "They won't be more than 25 percent of the industry," said John Hill, vice president of Southwest Vending Sales Co., one of the nation's largest independent game distributors. "The cost of the technology can't be afforded by the industry."
He points out that "Dragon's Lair," the first and most successful of the disc games, costs operators more than twice as much as conventional games and thus makes investing in them far riskier.